Sales Forecasting Flashcards
Importance of Sales Forecasting
1) Predicting staffing levels - Able to match output to demand
2) Predicting stock needed - so they dont run out when demand is high
Importance of predicting the trend in sales
The business can save money and not invest at that time
3 sales fluctuations
1) Random - ‘freak’ figures that stand out from any trend taking place
2) Cyclical - Cycle of high and lows in sales figures over a number of years
3) Seasonal - Unlikely or likely to have certain sales levels such as Ice cream producers
How Can Sales forecasts help with cash flow forecats
Gives the business a clear idea of what cash-inflows will be, so that finances cna be managed
How can Sales forecasts help with assessing capacity requiremenst
Enables the business to ensure that it has the capacity to meet the projected orders, if forecasts are high the business may need to buy additional equipment or rent/buy premises.
How does Inflation impact on a sales forecast
Inflation rises, so does prices so sales forecasts are reduced as consumers are likely to spend less at this time.
How does Exchange Rates impact on a sales forecast
Weaker pound means cheaper for UK consumers to buy goods + services and demand inside the UK will increase and so could sales
How does Interest Rates impact on a sales forecast
Costs of loans increase with high interest rates therefore sales forecasted may be adjusted down.
How do Competitors impact on sales forecasts
Where competitors use a strategy to capture market share form a rival, sales forecasts may need to be adjusted downwards.
How do volatile consumer tastes impact a sales forecast
Changing consumer tests can affect business sales.
